Exhibit
10.21


 


Execution
Version


 


AMENDMENT
NO. 4 TO CREDIT AGREEMENT


 


This Amendment No. 4 to Credit Agreement
(this “Agreement”) dated as of April 13, 2004 is made by
and among WALTER INDUSTRIES, INC., a Delaware
corporation (the “Borrower”), BANK OF AMERICA, N.A., a national
banking association organized and existing under the laws of the United States (“Bank of America”),
in its capacity as administrative agent for the Lenders (as defined
in the Credit Agreement (as defined below)) (in such capacity, the “Administrative Agent”), and each of the Lenders signatory
hereto, and each of the Guarantors (as defined in the Credit Agreement)
signatory hereto.


 


WITNESSETH:


 


WHEREAS, the Borrower, the Administrative Agent and
the Lenders have entered into that certain Credit Agreement dated as of April
17, 2003, as amended by Amendment No. 1 and Consent dated as of June 16, 2003,
as further amended by Amendment No. 2 to Credit Agreement dated as of October
28, 2003, and as further amended by Amendment No. 3 to Credit Agreement dated
as of March 24, 2004 (as so amended, as hereby amended and as from time to time
hereafter further amended, modified, supplemented, restated, or amended and
restated, the “Credit
Agreement”; the
capitalized terms used in this Agreement not otherwise defined herein shall
have the respective meanings given thereto in the Credit Agreement), pursuant
to which the Lenders have made available to the Borrower a term loan facility
and a revolving credit facility, including a letter of credit facility and a
swing line facility; and


 


WHEREAS, each of the Guarantors has entered into a
Guaranty pursuant to which it has guaranteed certain or all of the obligations
of the Borrower under the Credit Agreement and the other Loan Documents; and


 


WHEREAS, the Borrower has requested that the Administrative Agent and the
Lenders agree to amend certain terms of the Credit Agreement, which the
Administrative Agent and the Lenders party hereto are willing to do on the
terms and conditions contained in this Agreement;


 


NOW,
THEREFORE, in
consideration of the premises and further valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:


 


1.             Amendments to Credit Agreement. Subject to the terms and conditions set
forth herein, the Credit Agreement is hereby amended as follows:


 


(a)           The following new definitions are added to Section 1.01 in their
proper alphabetical order:


 


“Amendment No. 4”
means that certain Amendment No. 4 to Credit Agreement dated as of April 13,
2004 by and among the Borrower, the Guarantors, the Administrative Agent and
certain of the Lenders.


 

















 


“Convertible Notes” means Indebtedness of the Borrower in the form of notes issued by the
Borrower substantially simultaneously with the effectiveness of Amendment No. 4
that (i) is subordinated in payment to the Obligations hereunder and (ii) is
convertible into common equity of the Borrower, all on terms and subject to
documentation reasonably satisfactory to the Administrative Agent.


 


“Maximum Repurchase Amount” means, at any date of computation thereof, the sum of (a)
$25,000,000 plus (b) up to $25,000,000 of the amount by which the
initial aggregate principal amount of the issuance of the Convertible Notes
exceeds $125,000,000 plus (c) the amount of repurchases permitted by Section
8.06(d) but not utilized during the fiscal year of the Borrower ending
December 31, 2004; provided that (i) amounts set forth in subsection (c)
above will be the first dollars deemed to be utilized during the fiscal year of
the Borrower ending December 31, 2005, and (ii) this definition of “Maximum
Repurchase Amount” shall be reduced on January 1, 2006 by the amount provided
in subsection (c) above but not utilized prior to such date.


 


(b)           The
following new Section 2.06(d)(iv) is hereby added after the current Section
2.06(d)(iii):


 


(iv)          The Borrower shall make, or shall cause each
applicable Restricted Subsidiary to make, a prepayment in an amount equal to
one hundred percent (100%) of the Net Cash Proceeds of each private or public
issuance of Indebtedness of the Borrower or any Restricted Subsidiary permitted
by Section 8.03(n). Each prepayment required to be made pursuant to this
Section 2.06(d)(iv) shall be made simultaneously with the receipt of
such Net Cash Proceeds (or the next Business Day thereafter in the event such
Net Cash Proceeds are received later than the time necessary to make such
prepayment on the day of receipt thereof), with the Borrower providing written
notice thereof to the Administrative Agent simultaneously with the issuance of
such Indebtedness, which notice shall include a certificate of a Responsible
Officer of the Borrower setting forth in reasonable detail the calculations
utilized in computing the Net Cash Proceeds of such issuance; provided
that in the event the prepayment to be made pursuant to this Section
2.06(d)(iv) will be sufficient to repay the Term Loan B in full, including
all accrued interest and fees, and terminate the Term Loan B, then the
certificate of a Responsible Officer provided by this sentence shall not be
required.


 


(c)           The
following new sentence is added to the end of Section 2.06(d):


 


Notwithstanding
anything to the contrary in this Section 2.06(d), prepayments made under
Section 2.06(d)(iv) shall only be applied the Outstanding Amount of the
Term Loan B, and following the repayment in full of the Term Loan B no
prepayment of the Outstanding Amount under the Revolving Credit Facility, and
no reduction of the Aggregate Revolving Credit Commitments, shall be required with
the Net Cash Proceeds described in Section 2.06(d)(iv).


 


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(d)           The word “and” following Section 8.03(1)
is hereby deleted, the period following Section 8.03(m) is hereby
deleted and replaced with “; and”, and the following new Section 8.03(n)
is hereby added after the current Section 8.03(m):


 


(n)           a single issuance (including any exercise of an increase option in
connection with such issuance) of Convertible Notes in an
initial aggregate principal amount of not less than $125,000,000 but not in
excess of $175,000,000, so long as such issuance occurs on or prior to July 31,
2004.


 


(e)            Section 8.06(d) is hereby deleted in its entirety and
replaced with the following:


 


(d)           without limiting Section 8.06(e), at
any time during the fiscal year of the Borrower ending December 31, 2004 the
Borrower may make one or more repurchases of its own capital stock from holders
of such capital stock in an aggregate amount not to exceed $50,000,000 so long
as (i) the Borrower has issued the Indebtedness described in Section 8.03(n)
within the time provided therein in an initial principal amount not less than
$125,000,000 prior to the date of any such repurchase, (ii) the Term Loan B has
been paid in full and terminated prior to the date of any such repurchase, and
(iii) after giving pro forma effect to each such repurchase no Default shall
have occurred and be continuing;


 


(f)            Section 8.06(e) is hereby amended by deleting the clause
“without duplication of Section 8.06(d)” and replaced such clause with
“without limiting Section 8.06(d) or (f)”.


 


(g)           The following new Section 8.06(f) is
hereby added after the current Section 8.06(e):


 


(f)            without limiting Section 8.06(e), at
any time after December 31, 2004 the Borrower may repurchase shares of its own
capital stock for cash in an aggregate amount not to exceed the Maximum
Repurchase Amount so long as (i) the Borrower has issued the Indebtedness
described in Section 8.03(n) in an initial principal amount not less
than $125,000,000 within the time provided therein and prior to the date of any
such repurchase, (ii) the Term Loan B has been paid in full and terminated
prior to the date of any such repurchase, and (iii) after giving pro forma
effect to each such repurchase (A) the Consolidated Leverage Ratio is not
greater than 1.75 to 1.00, (B) the remaining amount available to be drawn under
the Revolving Credit Facility is not less than $100,000,000, and (C) no Default
shall have occurred and be continuing.


 


(h)           Section 8.12(a) is hereby deleted in its entirety and
replaced with the following:


 


(c)           Consolidated Leverage Ratio. Permit the Consolidated Leverage Ratio (i)
at any time to be greater than 2.75 to 1.00 except as provided in subpart (ii)
below with respect only to the fiscal quarter of the Borrower ending June 30,
2004, or (ii) in the event that there have been no CMO Financing Cash Proceeds
during the Four-Quarter Period ending June 30, 2004, at any time during the
fiscal quarter of the Borrower ending June 30, 2004 to be greater than (x) 4.25
to 1.00 if


 


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the
Borrower issues the Indebtedness permitted by Section 8.03(n) within the
time provided therein, or (y) 3.30 to 1.00 otherwise.


 


2.              Effectiveness; Conditions Precedent, The effectiveness of this Agreement and the
amendments to the Credit Agreement provided in Paragraph 1 hereof are
all subject to the satisfaction of each the following conditions precedent:


 


(a)            The
Administrative Agent shall have received each of the following documents or
instruments in form and substance reasonably acceptable to the Administrative
Agent:


 


(i)            counterparts of this Agreement, duly executed
by the Borrower, the Administrative Agent, each Guarantor and the Required
Lenders, together with all schedules and exhibits thereto duly completed, which
counterparts may be delivered by telefacsimile or other electronic means, but
such delivery will be promptly followed by the delivery of four (4) original
signature pages by each Person party hereto unless waived by the Administrative
Agent;


 


(ii)           such other assurances, certificates,
documents, consents or opinions as the Administrative Agent reasonably may
require.


 


(b)            All
fees and expenses payable to the Administrative Agent and the Lenders (including
the reasonable fees and expenses of counsel to the Administrative Agent) shall
have been paid in full (without prejudice to final settling of accounts for
such fees and expenses).


 


3.              Consent of the Guarantors. 
Each Guarantor hereby consents, acknowledges and agrees to the
amendments and other matters set forth herein and hereby confirms and ratifies
in all respects the Guaranty to which such Guarantor is a party (including
without limitation the continuation of such Guarantor’s payment and performance
obligations thereunder upon and after the effectiveness of this Agreement and
the amendments, waivers and consents contemplated hereby) and the
enforceability of such Guaranty against such Guarantor in accordance with its
terms.


 


4.              Representations and Warranties. In order to induce the Administrative Agent
and the Lenders to enter into this Agreement, the Borrower represents and
warrants to the Administrative Agent and the Lenders as follows:


 


(a)            The
representations and warranties made by the Borrower in Article VI of the
Credit Agreement and in each of the other Loan Documents to which it is a party
are true and correct in all material respects on and as of the date hereof,
except to the extent that such representations and warranties expressly relate
to an earlier date;


 


(b)           Since December 31, 2002, no event or circumstance has occurred, and no
action, suit, investigation or proceeding has been brought or, to the best of
the Borrower’s knowledge, threatened in any court or before any arbitrator or
Governmental Authority that has had or could be reasonably expected to have,
either individually or in the


 


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aggregate, a Material Adverse Effect, except
to the extent previously disclosed to the Administrative Agent and the Lenders;


 


(c)           The Persons appearing as Guarantors on the signature pages to this
Agreement constitute all Persons who are required to be Guarantors pursuant to
the terms of the Credit Agreement and the other Loan Documents, including
without limitation all Persons who became Subsidiaries or were otherwise
required to become Guarantors after the Closing Date, and each of such Persons
has become and remains a party to a Guaranty as a Guarantor;


 


(d)           This Agreement has been duly authorized, executed and delivered by the
Borrower and Guarantors party hereto and constitutes a legal, valid and binding
obligation of such parties, except as may be limited by general principles of
equity or by the effect of any applicable bankruptcy, insolvency, reorganization,
moratorium or similar law affecting creditors’ rights generally; and


 


(e)           After giving effect to this Agreement, no Default or Event of Default
has occurred and is continuing.


 


5.              Entire Agreement. 
This Agreement, together with all the Loan Documents (collectively, the
“Relevant Documents”), sets forth the entire understanding and agreement of the
parties hereto in relation to the subject matter hereof and supersedes any
prior negotiations and agreements among the parties relating to such subject
matter. No promise, condition, representation or warranty, express or implied,
not set forth in the Relevant Documents shall bind any party hereto, and no
such party has relied on any such promise, condition, representation or
warranty. Each of the parties hereto acknowledges that, except as otherwise
expressly stated in the Relevant Documents, no representations, warranties or
commitments, express or implied, have been made by any party to the other. None
of the terms or conditions of this Agreement may be changed, modified, waived
or canceled orally or otherwise, except in writing and in accordance with Section
11.01 of the Credit Agreement.


 


6.              Full Force and Effect of Agreement. 
Except as hereby specifically amended, modified or supplemented, the
Credit Agreement and all other Loan Documents are hereby confirmed and ratified
in all respects and shall be and remain in full force and effect according to
their respective terms.


 


7.              Counterparts. 
This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original as against any party whose signature appears
thereon, and all of which shall together constitute one and the same
instrument.


 


8.              Governing Law. 
This Agreement shall in all respects be governed by, and construed in
accordance with, the laws of the State of New York applicable to contracts
executed and to be performed entirely within such State, and shall be further
subject to the provisions of Sections 11.16(b) and 11.17 of the
Credit Agreement.


 


9.              Enforceability. 
Should any one or more of the provisions of this Agreement be determined
to be illegal or unenforceable as to one or more of the parties hereto, all
other


 


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provisions nevertheless
shall remain effective and binding on the parties hereto.


 


10.            References.  All references in any of the
Loan Documents to the “Credit Agreement” shall mean the Credit Agreement, as
amended hereby.


 


11.            Successors and Assigns. 
This Agreement shall be binding upon and inure to the benefit of the
Borrower, the Administrative Agent and each of the Guarantors and Lenders, and
their respective successors, legal representatives, and assignees to the extent
such assignees are permitted assignees as provided in Section 11.07 of
the Credit Agreement.


 


 


[Signature pages omitted.]


 


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